Ten weeks into each Y Combinator funding cycle, the founders present to investors at Demo Day. It’s probably the most exciting part of the 3 months we spend together.
10 weeks is not really a whole lot of time. But it’s enough to build something good enough to convince investors of your potential.
We tried something new this summer: in addition to presenting to investors in Boston, we’re flying all the founders out to Silicon Valley this week to present again at our office in Mountain View. We found that of all the previous startups that received follow-on funding, about 90% got it from west coast investors. Even ones that presented to Boston investors in summer ’05 and ’06 wound up moving to the Bay area for funding.
It’s gratifying how the east coast Demo Day has grown in popularity. The first summer we were praying people would show up. This year we had to put up a tent in our parking lot to accommodate everyone.
I think the founders were filled with a mix of excitement and anxiety as Demo Day approached. They had heard over and over what a big deal DDay was from alumni, but it wasn’t till a week before-- when they first rehearsed their presentations with the group and saw the list of attendees-- that it finally hit them. Y Combinator founders typically fall towards the Woz end of the continuum rather than the Jobs’ end; most aren’t that comfortable presenting to large audiences.
Well, the week they spent overhauling and practicing their presentations totally paid off. The founders really pulled it together under pressure!
But this often happens. What was surprising this summer was how many investors showed up, and that they all stayed to the end.
I think investors realize that it’s an efficient deal for them: they get to see 19 new startups in one afternoon. Based on past batches, it’s statistically almost certain there will be very successful companies among them.
And of course it’s also a good deal for the founders, who in two days get exposure to the top investors in the country.
10 weeks doesn’t seem like much time to make something to show to the nation’s top investors, but Y Combinator’s funding cycles are so concentrated that you get more done than you’d think possible. My three partners are all hackers, and one of their big principles is that hackers can be much more productive when they’re freed from distractions. Dinner each Tuesday is a big event, but the rest of the week we leave the founders alone to work, and during these stretches they get amazing amounts done.
So now 50 founders are all making their way across the country to the Bay Area, getting ready to fine-tune their presentations and try to convince another room full of investors that they are going to take over the world.